The financial collapse of electric-car venture Better Place Ltd., which filed for liquidation over the weekend, is a blow for French automotive group Renault SA, which helped the Israeli company develop its novel battery-switching system for electric cars.

Founded by Israeli entrepreneur Shai Agassi in 2007, Better Place developed a system where electric-car owners could drive their vehicles into a network of stations around Israel and replace the car's battery with a new one in about the same amount of time it takes to fill a gasoline tank on a regular car.

The "quick drop" system was supposed to remove one of the main obstacles to the adoption of electric vehicles, namely the several hours it takes to recharge a flat battery.

Renault CEO Carlos Ghosn had championed Better Place's technology as one of the pillars of the French auto maker's ambitious €4 billion ($5.17 billion) electric-vehicle strategy. The first cars equipped with Better Place technology were Renault Fluence Z.E. sedans.

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But the system never attracted enough users to be commercially viable. "Unfortunately, after a year's commercial operation, it was clear to us that despite many satisfied customers, the wider public take up would not be sufficient and that the support from the car producers was not forthcoming," said Better Place Chief Executive Dan Cohen in a statement.

Renault said it would continue to explore all charging technologies, including quick drop. "This decision does not at all call into question the electric vehicle strategy of the Renault-Nissan Alliance," the company said in a statement.

Bouygues, a major French property developer and one of the world's largest construction companies, has committed to converting buildings to the needs of electric-car owners, starting with its own sprawling complex west of Paris where it plans to install dozens of charging points to ensure employees' car batteries can be recharged when their vehicles aren't in use.

Bouygues said it would learn from Renault's expertise in electric-vehicle technology, allowing it to integrate it in future construction projects and retrofit existing buildings.

Mr. Ghosn is upbeat about the new partnership—though he once had high hopes for Better Place too—particularly as Renault's first compact electric car, the ZOE, has just gone on sale in France.

"We're looking at innovative solutions, for example using batteries from electric vehicles to store energy in buildings," Mr. Ghosn said Monday.

ENLARGE

An electric car at the Tel Aviv headquarters of Better Place, whose battery-switching system was developed with Renault.
Reuters

Better Place, which is 28%-held by shipping-to-fertilizer conglomerate Israel Corp., raised around $850 million from investors that included HSBC Holdings PLC, General Electric Co., Lazard Asset Management, Morgan Stanley, and VantagePoint Capital Partners as well as Israel Corp.

The project drew global attention, with Mr. Agassi named one of the top people of the year by Time magazine in 2009 while Israeli President Shimon Peres often spoke publicly of the project, touting it as a step toward national energy independence.

In late 2012, Better Place said it hadn't sold as many cars as expected and said it would seek an additional investor. Around the same time, Mr. Agassi left the company. His successor, Evan Thornley, quit after two months. Mr. Ghosn recently said Renault wouldn't equip models other than the Fluence with the battery-swapping technology.

Better Place struggled partly because it only had a few dozen battery-switching stations in Israel and Denmark—the company abandoned projects in the U.S. and Australia—while the specially adapted Fluence sedans were too large given the small-car preference of local consumers. The battery-switching system also couldn't be transposed to other vehicles.

Better Place's business model was based on car owners paying a fee according to the number of miles they drive, which Mr. Agassi likened to a mobile-phone subscription.

Better Place initially ordered 100,000 cars from Renault but the auto maker has so far sold only about 2,500.

Current and former Better Place officials said that poor execution of the company's strategy rather than the technology itself was the root cause of the company's collapse.

"There is definitely interest in the technology from China and India," one former executive said Sunday, speaking on condition of anonymity. "They understand the potential for extending range and lowering cost."

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